Global IT spending by financial services (banking, insurance, and securities and investments) will increase 2.9 percent to $357.4 billion in 2010, according to financial-industry research firm Celent. Spending is expected to reach $393.5 billion by 2012. IT spending in the financial sector declined 2.5 percent in 2009. "After a difficult 2009, growth rates are starting to climb across all regions,” said Jacob Jegher, senior analyst with Celent's Banking Group. “2010 has the potential to be the start of a turnaround, but there is still plenty of uncertainty in the industry and we are not completely out of the woods." "European and US financial institutions have been hit particularly hard,” Jegher said.
Europe (36 percent) and North America (33.1 percent) account for more than two-thirds of the financial sector’s IT spend. The Asia-Pacific market accounts for 25.2 percent. Latin America and Africa together account for only 5.7 percent.
Celent predicts that the fastest growth in financial-services IT spending will occur in the Asia-Pacific region, increasing at a CAGR of 6.2 percent from 2010 to 2012. The global GAGR over this period is expected to be 4.9 percent.
In its analysis of the North American banking industry, Celent predicts that IT spending will grow 2.2 percent in 2010 after two years of decline, growing to $51.4 billion in 2010. Celent predicts that spending will reach $55 billion in 2012.
“In an ideal world, spending on new investments and innovation would take up the lion's share of the pie,” Jegher said. “However, US banks have slashed spending on new investments, particularly those focused on retail banking.”
"The challenge is actually being able to come up with additional funds once compliance/regulatory spending, post-merger integration, and maintenance expenditures have been spoken for,” Jegher said. “Not to mention that the financial crisis has made it extremely difficult to get new projects funded."